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Sky Lakes Medical Center, Inc. v. State

Court of Appeals of Oregon

September 11, 2019

SKY LAKES MEDICAL CENTER, INC., Petitioner,
v.
CITY OF KLAMATH FALLS; State of Oregon Department of Administrative Services; Department of Human Services;and Klamath Falls Holdings, LLC, Respondents.

          Argued and submitted August 9, 2019

          Land Use Board of Appeals 2019019

          Josh Newton argued the cause for petitioner. Also on the brief was Karnopp Petersen LLP.

          Garrett K. West argued the cause for respondents City of Klamath Falls and Klamath Falls Holdings, LLC. Also on the joint brief were Jarvis, Dreyer, Glatte & Larsen, LLP, and Michael Swanson.

          Ellen F. Rosenblum, Attorney General, Benjamin Gutman, Solicitor General, and Denise G. Fjordbeck, Assistant Attorney General, fled the brief for respondents State of Oregon Department of Administrative Services and Department of Human Services.

          Before Lagesen, Presiding Judge, and Powers, Judge, and Kistler, Senior Judge.

         Case Summary:

         Sky Lakes Medical Center, Inc., petitions for review of a final order of the Land Use Board of Appeals (LUBA) affirming the Klamath Falls City Council's approval of a conditional use permit for a three-story office building. The building was to be leased to the Department of Human Services. Petitioner assigns error to LUBA's conclusion that the city plausibly construed certain provisions of its own Community Development Ordinance (CDO) when it determined that the "principal use" of the building is "government office" and not "social service."

         Held:

         Under Siporen v. City of Medford, 349 Or. 247, 262, 243 P.3d [299 Or.App. 344] 776 (2010), LUBA correctly determined that it was required to accept the city's interpretation of its own CDO.

         [299 Or.App. 345] LAGESEN, P. J.

         Sky Lakes Medical Center, Inc. (petitioner), has petitioned for judicial review of a final order of the Land Use Board of Appeals (LUBA). ORS 197.850. In that order, LUBA affirmed in part and remanded in part decisions by the Klamath Falls City Council that approved respondent Klamath Falls Holdings' applications for a conditional use permit and site design review for a three-story office building to be constructed in a Mixed Use (MU) zone in the city's downtown central business district. On review to determine whether LUBA's order is "unlawful in substance," ORS l97.85O(9)(a), we affirm.

         The plan for the building is that respondent Department of Human Services (DHS) will lease the building in its entirety for the purpose of operating a "DHS MultiService Center," which will permit DHS to consolidate its Klamath Falls operations at a single location. DHS plans to use the first floor of the building to provide a variety of direct services to the public, and DHS also will sublease some portion of the first floor to another service provider, Klamath Basin Behavioral Health. DHS intends to use the other two floors as office space for DHS employees. Approximately 265 DHS employees will work in the building. The issue posed by petitioner is whether LUBA erred in concluding that the city plausibly construed certain provisions of its own Community Development Ordinance (CDO) when it determined that the "principal use"[1] of the building is "government office, "[2] and not "social service" (a term the CDO does not define). That issue matters to the parties because, under the CDO, only one "principal use" is permitted per lot. If the building's "principal use" is "social service," as petitioner contends, that use would not be an allowed "principal use" in the city's MU zone. In petitioner's view, the CDO, correctly interpreted, required the city to conclude that "social service" is the "principal use" of the building, and LUBA erred in accepting the city's contrary interpretation.

         [299 Or.App. 346] Under ORS 197.829(1), LUBA is required to accept a local government's interpretation of its own land use ordinance if that interpretation "plausibly accounts for the text and context" of the ordinance. Siporen v. City of Medford,349 Or. 247, 262, 243 P.3d 776 (2010). Here, LUBA did what it was supposed to do under ORS 197.829(1), as interpreted by Siporen. The city supplied a considered analysis of how its interpretation accounts for the text and context of the pertinent provisions of CDO 10.010 and CDO 12.000.[3] In particular, the city observed that the plain terms of the definition of "government office" in CDO 10.010-"[a]n office where government employees work"-capture the proposed predominant use of the building: an office building where DHS employees will work. Then, analyzing the context of the term "government office," the city explained how that context demonstrated that the fact that DHS operations included a social services "component" did not transform its predominant use into "social services" for purposes of the code. The city observed that other public uses identified in CDO 12.000, such as churches, schools, parks and recreation facilities, hospitals, and fraternal lodges, often ...


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